- 6 -
corporation was unable to borrow from any of the local banks,
petitioner loaned $50,000 to the corporation so that the
corporation would have adequate working capital and could
establish credit. The loan was evidenced by an "investment
certificate", dated May 23, 1977, showing an initial maturity
date of May 23, 1978, with a right of renewal, and for the
payment of interest at 7 percent per annum. Petitioner made two
additional advances to the corporation, $11,000 on October 25,
1977, and $50,000 on January 1, 1978, as it became necessary to
sustain and expand the corporation's property transactions. Both
of these advances were also evidenced by "investment
certificates", which provided initial maturity dates of 1 year
after the date of the certificate, a renewal option, and interest
at 7 percent per annum. In all, petitioner advanced $111,000 to
the corporation through the "investment certificates".
Petitioner and Mr. Takos decided that, until the corporation was
financially able to establish regular salaries for the two
officers, each officer would receive, in place of a stated
salary, 50 percent of the net proceeds from commissions and fees
received annually by the corporation, up to a maximum of $20,000
per year per officer.
From 1977 to 1979, the corporation enjoyed some success.
The total commissions and fees received during these 3 years were
$8,865, $32,340, and $79,712, respectively. Petitioner received,
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011